Most companies in the IT Industry, including IBM, have
a long-standing policy of licensing patents under “Reasonable and
Non–Discriminatory” (RAND) terms when participating in standards setting
activities.This approach encourages
participants to contribute more of their patented technology resulting in the
adoption of the best technical solutions. Allowing the standards activities to
proceed in this manner, while moving the discussion of patent licenses outside
of the standards developing organization, permits company-to-company patent
dialogue and encourages individualized solutions to patent license
issues.

The W3C Patent Policy Framework Proposal attempts to
solve the patent issue by offering a choice of license modes to chartered
working groups.The following comments
from IBM highlight areas in the current Patent Policy Framework draft that
contribute to uncertainty and unfairness in the implementation of this
policy.IBM’s suggestions are offered
to improve certainty for implementers of W3C specifications
(Recommendations).

Even though a RAND only patent policy would be
preferred, IBM will continue to work with the W3C to refine its patent
policy.IBM plans to continue its
participation in ‘Royalty Free’ (RF) and RAND working groups whenever it makes
good business sense.

EXECUTIVE
SUMMARY

The current W3C Patent Policy Framework Proposal does
not provide certainty for specification developers and product implementers.
This may dampen participation in specification development and adoption of W3C
specifications while adversely affecting the progress of worldwide web
development.

A W3C working group’s patent licensing mode should be
decided at the time the working group is chartered and remain constant through
acceptance and implementation of the resulting specification.This approach simplifies the patent policy
operation and potentially curtails, or possibly eliminates,“royalty free reciprocity” and Patent
Advisory Groups(PAGs).

In addition, it is important that the minimum
commitment by W3C members be RAND, accompanied by an option for patent owners
to use their patent(s) defensively when a patent action is brought against
them by a licensee.Members could then
provide patent license commitments with the assurance that they can use their
patents defensively, when necessary.

Finally, the commitment by all working group
participants must remain in harmony with the original charter’s license
mode.This removes imbalances in the
current Patent Policy Framework by eliminating a variety of devices for
changing a working group’s license mode during specification development.

These basic aspects of a revised Patent Policy
Framework will contribute greatly to certainty and fairness for the W3C
members and other implementers which will greatly enhance participation by
members in W3C activities.

Accordingly, the following is
proposed:

1) Maintain a working group’s originally chartered
patent licensing mode by eliminating the use of“Universal Reciprocity” and reducing the
frequency of‘Patent Advisory Groups’
invoked to change licensing modes.

2) Eliminate “Opt-Out” by owners of essential patent
claims.

3) Allow W3C members to retain the defensive use of
their patents.

4) Institute equivalence in patent licensing
commitments for both working group Contributors and Non-Contributors
(participants).

EXPLANATION

1) Maintain a
working group’s originally chartered patent licensing mode by eliminating the
use of“Universal Reciprocity” and
reducing the frequency of‘Patent
Advisory Groups’ invoked to change licensing modes.

A consistent and fixed licensing mode does not exist
for RF or RAND working groups.The
license mode can remain open or change at the completion of specification
development.Two mechanisms,
‘Universal Reciprocity’ and‘Patent
Advisory Groups’ (PAGs), contribute to uncertainty when they initiate a change
in a working group’s licensing mode.

Under the current proposal, any member of a working
group which has been chartered under a RAND licensing mode, may unilaterally
offer RF licenses under one or more patents with essential claims to anyone
who is willing to provide reciprocal rights to all implementers of a
specification.This will force the
other participants, who will need a license under the offering participant’s
patents, to grant RF licenses to all implementers under patents they were
expecting to license under the RAND mode.Since this violates the original RAND charter of the working group, a
PAG would be initiated to determine whether the working group must be
re-chartered under a RF licensing mode, potentially requiring all work
expended on the specification to be discarded.

Similarly, under a RF licensing mode, non-contributing
participants are permitted to provide RAND license commitments under essential
claims.However, a contributor or
another participant, holding essential claims, can declare RF Universal
Reciprocity.This would either require
all working group participants to offer RF licenses, or to initiate a
PAG.

These mechanisms lead to a substantial amount of time
and resource being wasted.The lack of
certainty as to the ultimate licensing mode for a working group will cause
participants to rethink joining or contributing to certain working
groups.To avoid this, participants
should not be able to change ‘the chartered licensing mode’.

If a working
group starts as RF, the working group should stay RF.Similarly, if a working group starts as
RAND, it should remain RAND.All
participants of a working group should expect to provide licenses to essential
claims under the charter’s defined licensing mode.

Limiting or
eliminating the use of PAGs will increase the efficiency of the W3C working
groups and accelerate the creation of new specifications.Universal Reciprocity and PAGs should not
be employed to change the working group licensing mode.

2) Eliminate
“Opt-Out” by owners of essential patent claims.

Working group participants would definitely prefer to
know if licenses under essential claims of patents will be available.

Working group participants can be unexpectedly denied
access under another working group member’s essential patent claims, through
the process of opting out. (I.e. a member decides not to license certain
essential claims and thus leaves the other participants, who have relied upon
the working group’s licensing policy, exposed to a potential patent
problem).Presently, participants may
Opt-Out as late as sixty days after Last Call.Opt-Out promotes uncertainty for
implementers of W3C Recommendations and should not be adopted.Opt-Out is inequitable to conscientious
participants who do not Opt-Out. The fear is that Opt-Outs will escalate over
time, when participants become disadvantaged due to the Opt-Out practices of
others.

Regardless of the licensing mode, RF or RAND, W3C
Members should not Opt-Out of licensing essential claims.Opt-Out should either be eliminated from
the W3C Patent Policy or its utilization should be substantially limited.Three approaches are available to move the
patent policy towards more certainty.(1) W3C members should refrain from participating in a working group,
if it is likely they will prefer to not provide licenses to their essential
patents.(2) W3C members should
identify specific patents, which are unavailable for licensing, prior to
initiating their involvement in the working group.(3) At the very least, patents issued
through the termination date (Opt-Out date) should remain available for
licensing to implementers if a work group participant terminates involvement
in a working group.

3) Allow W3C
members to retain the defensive use of their patents.

A patent owner does not retain the ability to terminate
the patent license when a licensee initiates a patent action against the
patent owner.In certain
circumstances, a patent owner will participate in a working group, commit its
patents and subsequently find that a patent action is being taken against them
by a licensee in an area where the original patent owner has no patents with
which to defend itself.The licensee
who brought the action still enjoys the protection of the original patent
owner’s license under the current rules of the current W3C Patent Policy
Framework draft.

We propose that the original patent owner retain the
right to withdraw or terminate licenses for patents with essential claims when
a licensee institutes a patent infringement action against the patent owner.
(This process only affects the party who has brought suit.All other licenses remain in force.)

Maintaining the defensive use of patents will minimize
unfairness and encourage patent holder participation in working groups. This
concept has been used in other standards organizations and in open source
licenses and should be added to the current W3C Patent Policy Framework
Proposal.

4) Institute
equivalence in patent licensing commitments for both working group
Contributors and Non-Contributors (participants).

The licensing obligations of working group Contributors
are differentiated from those of other working group participants.Under both RF and RAND working group modes,
a Contributor is not able to Opt-Out, while other participants can Opt-Out,
through sixty days after the Last Call.This has the effect of creating a class of observers in a working group
who can obtain implementation lead-time advantages and patent license benefits
while being allowed to withhold patent license commitments.

In a RF working group, only Contributors are fully
committed to RF.Other participants
can avoid contributing to the specification, maintaining a RAND approach to
essential claims.

In a RAND working group, Non-contributors are provided
with potential leverage over Contributors, who are captive to the working
group’s chartered licensing mode. As mentioned in item 1 above, in a RAND
working group, both Contributors and Non-contributors (participants) are
committed to RAND, but a Non-contributor can declare “RF Universal
Reciprocity”, which may force the Contributor to license RF.In the event such agreement cannot be
reached, a PAG would address dissolution of the working group which
necessitates rechartering the working group and reinitiating the technical
work.

These differences between Contributors and
Non-contributors should be eliminated by having all working group members make
the same commitment to the license mode of the working group, resulting in
a“level playing field” for all
working group participants.

Summary:

Adoption of the defensive use of a member’s patents and
the elimination of the patent policy aspects listed below would improve the
effectiveness of the proposed W3C Patent Policy Framework Proposal:

1) Ability to change
licensing mode of working group

2) Opt-Out at
late stages of working group

3) Unequal
licensing requirements for working group contributors and participants

The above modifications to the W3C Patent Policy
Framework Proposal would provide an equitable environment for the development
of both RF and RAND Recommendations.